Market report
Status: 10/27/2021 7:27 a.m.
The bulls have the scepter in hand, the German benchmark index can hold yesterday’s level for the time being. But after weak specifications from overseas, the momentum could weaken.
The DAX is expected to start trading at 15,725 points, which corresponds to a minus of 0.2 percent compared to yesterday’s XETRA close. This means that the leading index can roughly defend its price gains of the past few days.
In the morning, ambiguous requirements come from overseas. Thanks to many good business figures from US companies, the Dow Jones index in New York increased again minimally to just under 35,757 points, enough for a new record. The tech-heavy Nasdaq jumped 0.1 percent to 15,236 points, and the broad S&P 500 jumped 0.2 percent to 4,575 points, also a new high.
Market participants said that some of the disappointing outlooks were due to delivery problems. This stirs confidence that the US economy will master these challenges. “The proof that growth will break down due to slightly higher interest rates and a little more inflation has yet to be provided,” said analyst Jochen Stanzl from the online broker CMC Markets. “The shortage of investments in equities currently outweighs the fear of clouding over by pressure on margins and inflation.”
In Asia too, however, the upswing flagged in the morning after several strong trading days. Here, too, investors are worried about interest rates and inflation. The Japanese Nikkei index is 0.6 percent lower at 28,947 points. The Shanghai stock exchange is one percent in the red. The index of the most important companies in Shanghai and Shenzen is currently losing 1.2 percent.
On the foreign exchange market, the euro can only hold its ground just above the $ 1.16 mark in the morning. The common currency is trading at $ 1.1605. Oil prices continued to decline slightly. A barrel of North Sea Brent costs $ 85.20, around half a percent less than yesterday. The price of the troy ounce of gold has also fallen slightly to $ 1,789.
A number of US technology heavyweights presented quarterly figures that evening, which were largely well received in after-hours US trading.
The Google parent Alphabet continues to benefit massively from the digitization of life in the corona pandemic. In the last quarter the turnover of the Internet group rose year-on-year by 41 percent to a good 65.1 billion dollars (56.1 billion euros). The profit jumped from $ 11.2 billion to $ 18.9 billion. Google’s advertising business contributed the lion’s share of the business at $ 53.1 billion. While the ads around Google’s search engine are still the mainstay, the importance of the YouTube video platform has also increased. Its advertising revenues climbed from five to 7.2 billion dollars. The business with cloud services, in which Google wants to catch up with Amazon, grew by around 45 percent to almost five billion dollars.
The software group earned well in the past fiscal quarter thanks to its flourishing cloud services. Net income rose 48 percent year-on-year to $ 20.5 billion in the three months ended September. The sharp increase was also due to a tax credit worth billions. The company’s revenue grew 22 percent to $ 45.3 billion. The figures exceeded expectations, the share initially rose slightly after the trading hours. The cloud business in particular continued to boom with a 50 percent increase in sales.
The corona crisis continues to generate increasing revenues on Twitter. In the third quarter, sales rose 37 percent to $ 1.28 billion, as the world’s largest short message service announced. In the fourth quarter, the revenue should be between 1.5 and 1.6 billion dollars. Even so, competitors like TikTok Twitter are digging a bit of the water. The number of daily active users increased by 13 percent to 211 million. However, Twitter fell short of analysts’ expectations.
Quarterly figures from German companies have already arrived in the morning. Good demand and higher prices for its products make the world’s largest chemical company, BASF, confident. The company is becoming more optimistic for the year as a whole. For 2021, BASF now expects sales between 76 and 78 billion euros. The company also expects more significant increases on the earnings side. In the third quarter, sales at BASF increased by 42 percent to 19.7 billion euros. The operating result (EBIT) before special items rose to just under 1.9 billion euros after 581 million euros in the previous year. The bottom line is that BASF posted a profit of 1.25 billion euros.
Germany’s largest financial institution achieved a bottom line profit of 194 million euros in the third quarter, as it announced on Wednesday. That is an increase of seven percent compared to the same period last year and more than the analysts had expected on average. This means that Deutsche Bank has been able to post profits for five quarters in a row. Group earnings rose by two percent to six billion euros. Deutsche Bank is in the middle of a comprehensive restructuring. Entire departments were closed, risky parts of investment banking were sold and extensive austerity measures were initiated.
The Hamburg consumer goods group climbs back up to the top stock exchange league. With effect from Friday, the Tesa manufacturer will move into the German leading index DAX, which it had to leave in the spring. It is the first change since the DAX expanded from 30 to 40 stocks in September. Beiersdorf is replacing the Deutsche Wohnen share there, as Deutsche Börse announced on Tuesday evening in Frankfurt. The housing group has to move out of the index after it was taken over by its larger competitor Vonovia.
The Hamburg biotech company Evotec wants to raise around 500 million euros with its IPO in New York. This emerges from the filing with the US Securities and Exchange Commission that Evotec filed on Tuesday. Thereafter, up to 22 million US depository receipts (ADS) are to be sold, each of which corresponds to half a share of Evotec common stock. At the XETRA closing price on Tuesday of 43.23 euros, the company could take around 475 million euros. The Evotec ADS are to be listed on the Nasdaq Global Select Market of the US technology exchange Nasdaq.